Do you "float" checks?

Discussion in 'Homesteading Questions' started by Vera, Oct 8, 2004.

  1. Vera

    Vera Well-Known Member

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    In the latest newsletter from my credit union, there's a paragraph on a new law ("Check 21")... as of 10/28, checks will be processed as an electronic transaction, which means that they'll clear within hours rather than days. So, if you have a habit of "floating" checks, this won't work anymore and if you keep doing it, your checks will bounce. This seems to be a federal law, so it's nothing people can "opt out of"... your bank should have info on this new law and also on your rights in case of a dispute on an item.

    Floating checks seems to be a regular thing for a lot of people, so this is something to keep in mind. You don't wanna have to deal with bounced-check or non-sufficient-fund fees, or with all the hassle that comes with bounced checks...
     
  2. WIPPdriver

    WIPPdriver Well-Known Member

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    This why my wife and I started using money orders about 3 years ago. Don't have to worry about bouncing checks. :D The banks are in the habit of processing the largest to the smallest checks everyday in order to depleate to account quicker to try to bounce checks. :yeeha: It is a money maker for the banks.
     

  3. Little Quacker in OR

    Little Quacker in OR Well-Known Member

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    :) My dh was a banker. I NEVER write a check that I don't have the funds in the bank to cover the amount. NO way!

    LQ ;)
     
  4. Cyngbaeld

    Cyngbaeld In Remembrance Supporter

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    We direct deposit. I know when the money is supposed to be there, but normally will try to wait a couple of days before writing checks. I would be really nervous about floating a check. Besides, it seems a bit dishonest to me to spend money that I don't have yet. I also try to keep a cushion for emergencies.
     
  5. Tracy Rimmer

    Tracy Rimmer CF, Classroom & Books Mod Supporter

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    This IS dishonest, not to mention HIGHLY illegal. It's fraud -- and those who do this should consider themselves lucky if the bank only charges a service charge.

    Do it often enough, and the bank has every right to press charges -- and if convicted of fraud, you could be looking at jail time.

    Tracy
     
  6. coso

    coso Well-Known Member Supporter

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    October the 28th the law goes into effect but from what I'm hearing there is going to be very few banks that are going to be able to utilize this. The Fed is not going to be setup to clear through them this way until 1st qtr 05. Some of the larger banks have been doing this between themselves for quite a while. Most people will not see a difference unless you still get your orignal checks back in the mail. In which case they can send you a certified check copy for your records instead of the original. You won't see much of this either for a while, because few are really ready for this. This is one instance where the govt got the cart before the horse. The infrastructure is not there to support this at this point. In a year or two probably. Don't write checks if the money is not there and you won't have to worry about it.
     
  7. Jan Doling

    Jan Doling Well-Known Member

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    Won't the money orders also be processed immediately now?
     
  8. Gary in ohio

    Gary in ohio Well-Known Member Supporter

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    Check 21 is going into effect the end of the month. MOST banks are not ready for it. " processed as an electronic transaction" is partly true, Check by mail and Debt cards are electronic transactions. Your amount will not be validated as soon as it hit yours bank, but much quicker than it has in the past.

    If you have an account at BANKA and you write a check to walmart they would deposit the check in there account at bankB. BankB would send the physical paper copy of the check to your bankA. BankA would then process the check, debit your account and credit wallmart at banksB. This moving of checks is done by trucks and planes through a "Postal" style deliver system. There are couriers all over the US that do nothing but move checks from banking centers to banking centers.

    Part of the new system will allow BANKB to send a copy of the check to BANKB to allow them to process without waiting for the courier. In general banks only process checks a couple of times a day through sorting machines. These machines keep a copy of the checks being sent to another bank.

    The scarry part of check21 is that BANKB can now LEGALLY, make a "fake check" that has all your bank info on it, but doesnt look like your check and submit that as your check for electronic transfer purpose. For the consumer, getting paper checks back will be worthless because they will not look like the check you wrote. The comments and notes you might make would be gone. The likness of your check would be gone. These new bank created checks be come LEGAL checks for anything you would LEGALLY use your current checks for.

    Here is a nice faq http://www.federalreserve.gov/paymentsystems/truncation/faqs.htm
     
  9. coso

    coso Well-Known Member Supporter

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    From what I'm hearing it will be a copy of the check you wrote at about 2/3rds the size so you would still be able to see any notations on the check that you had put on there. To the left side of the check there will be Fed lingo.
     
  10. DayBird

    DayBird Big Bird

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    It has nothing to do with the new law, but the petstore I work for (100+ stores in the SouthEast) has been doing "Electronic Funds Transfers" through Telecheck for almost 4 years. We take your paper check, run it through their machine and enter the total for the transaction that may or may not match what the customer has written on the check. The machine then dials out to Telecheck and accepts or declines the check. It prints a receipt showing the amount entered which the customer must sign. I keep this signed reciept in the cash register. The original check is automatically voided on the front and I flip it over and a copy of the receipt the customer has signed is printed on the back. The customer gets their now voided check back and a copy of the cash register receipt showing the purchases.

    After the store closes at 9:00pm, we balance out the registers. We print a report from the Telecheck machine and balance the signed check receipts to this. We then close the "batch" where the machine then dials out and transfers the totals. Our money is electronically transfered from Telecheck to our corporate office at midnight every night and Telecheck contacts the banks to transfer money into their own system.

    This is done to eliminate bad checks on the store level. Our company has used Telechecks services for almost a decade and have been extremelly happy with this new service since the beginning. No bad checks and no paper checks to endorse, log on a deposit ticket and take to the bank.

    Electronic Funds Transfers are nothing new to us. We're very happy with them both at the store and at home.
     
  11. gmom

    gmom Well-Known Member

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    That right, you will be able to purchase a copy of the check if you need it for a price. And fees for innsufficent funds are going to be increased.
     
  12. michelleIL

    michelleIL tryna be His

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    All you landlords with tenant woes better be prepared for your poorer tenants to be late with rent once in a while then, cuz payday doesn't exactly fall on the same day or before the rent is due!
    HH!!
    Michelle
     
  13. MikeD

    MikeD Well-Known Member

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    Please forgive me if this double posts. Technical difficulties seem to abound in my computer these days....

    My problem with Check 21 ("Check cashing In the 21 Century Act" I believe is the full title - thank you, Mr. Bush) is several fold. The most innocuous of my issues is that as a consumer I am paying for that physical check and, as it is my personal property, I want it back - not an "electronic representation". Secondly, and more importantly, I have yet to trip over anything that unequivocally states that these "electronic representations" will be considered admissible in a court of law should they be necessary for evidentiary purposes. My experience stems directly from a legal battle that I have been fighting against my mortgage servicer for over two years now. If Check 21 were in effect two years ago, I may not have been prepared with the cancelled physical checks that I now have to show that more than $7,000.00 in mortgage payments have been misapplied by this servicer. In fact, I found out this afternoon that the servicer is claiming that a single payment of more than $3000.00 was not accounted for and is deemed "missing" according to their bookkeeping. I, of course, have that cancelled physical check to prove not only that the check itself was cashed by the servicer but, since it WAS cashed, I have the time and date of deposit into the servicer's account.

    I am not at all confident that I will have any of that information once Check 21 goes into effect. As far as I can tell, the only thing that Check 21 will accomplish is greater savings and larger profit margins for the banks in the form of less paperwork and greater fees generated by NSF checks and charges for requesting check copies. And since they are "electronic representations" (digital images I am assuming) just how easy will it be for anyone so inclined to alter these images or delete them altogether? Assuming that a copy costs $15 to obtain it would have cost me $360 to secure the evidence necessary to defend my home against an illegal foreclosure that has already cost tens of thousands of dollars in legal fees and expert witnesses and is nowhere near being settled. Bottom line - I fail to see what good Check 21 does for the consumer. All of it's benefits go in the bank's column from my understanding. If I am not going to be getting my physical checks returned I am most definitely going to have to find a new way to do business. I simply cannot afford to "babysit" each and every personal or business transaction that I make. That is what I am paying my bank to do and I expect them to do the job that they are paid to do.
     
  14. Mommalee

    Mommalee Well-Known Member

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    Amen and amen. LOL
     
  15. blhmabbott

    blhmabbott We're gettin' there!

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    Not sure if this question applies to this topic, but what happens to my paper copies of my checks? The banks here have switched to sending you copies of your original checks with your monthly statements instead of the checks themselves. I don't pay for my checks but do pay a service fee every month. Am I not intitled to receiving my checks back? Now there is a "Deposited on: ___" and then the date under each copy of a deposit slip and a "Paid on: ___" and the date under each cleared check, but what are they doing with my checks? Throwing them out?
    To the best of my knowledge, there is only one place here that does the electronic check thing so far, even though there are many that have that Telecheck sticker on their window. We just don't write checks if the money isn't in the account.
    Heather
     
  16. Cindy in PA

    Cindy in PA Well-Known Member

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    Another thing that was in the original bill is that if they make an error and take out over a certain amount, they have 60 dyas to correct it. Now I don't know what you think, but if they take say 2000 by mistake, I cannot wait 2 months to get it back. There will be so many people dipping in and out that I think it will be a mess. No one should be able to get funds instantly from my account except me or my bank. I sure will not send payment early anymore.
     
  17. DAVID In Wisconsin

    DAVID In Wisconsin Well-Known Member

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    I've had $$ in and out of my accounts electronically for a few years now. I've had no problems with it. I already have some companies that don't actually use my paper chack they simply turn it inot an ACH transaction. I NEVER, EVER float checks. I also like the idea of checks clearing faster. I currenlt wait about a week before I write a check on money that I have deposited into my checking account.
     
  18. BCR

    BCR Well-Known Member

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    Jan--to get a money order you must pay cash for it, so there is no matter when the person deposits it as it was valid to use the moment you bought it. But that means you have to have the cash and feel comfortable carrying it around to go get the money order.

    That said, I have never had a problem buying one in the past and have even had a large enough bill that I had to buy two to pay it, since one is only good for up to a certain amount. You get a carbon or similar copy of the original for your records, depending on who you purchase the money order from.
     
  19. Kevin and Laura

    Kevin and Laura Well-Known Member

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    I guess this "floating" checks is what I've always heard called hoping that the paycheck hit the account before the check wrote to walmart did. As someone else mentioned, it seems dishonest, and not a fiscally responsible way to handle finances. Lots of business around here (mid-Missouri) have gone to telecheck and we haven't had any problems with it. We keep a buffer in our checking account and have auto transfer from savings if needed. But mostly, we don't write checks on money that isn't in the account. If you write a bad check, the business is going to charge you $20 or more, and your bank is going to charge you $10 or more. The risk just isn't worth it.

    If your rent is due before you get paid, then you need to be a month ahead and have that money ready. This may sound harsh to some, but if you don't have the money to pay bills on time each month, then you are either overextended or somebody needs to get a part-time job for a month or two to generate a buffer in your account. I've had bank accounts since I was 16 (34 now) and Kevin has had them since he was 12 (w/parent's cosig) and we've only once had a bank problem and it was that when I transferred from savings to checking, they took it out of savings but put it back into savings too. This didn't cause us any real problems, because of the safety buffer I'm speaking about.

    Our bank has online banking, so I can go on there and print out anything I need and see all of the activity in my accounts for the last 90 days. Things will continue to get more technologically advanced. I guess those who don't wish to deal with it will have to do what another poster mentioned, use money orders paid for with cash and don't have a bank account.

    Have a good day, Laura
     
  20. caroline00

    caroline00 Well-Known Member

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    according to our bank, the businesses who use this system will scan your check, void it and hand it back to you.